Land - Easement & Restrictive Covenants (3)

5. Alex divided his land into four equal-sized plots (plots A, B, C, and D) and built a substantial house on each of them. He decided to live on plot A himself and he sold plots B, C, and D to Barry, Carol and Diana in that order. When they purchased their plots, Barry, Carol and Diana entered into identical covenants “with Alex and his successors-in-title”, covenanting (i) to use the house as a single dwelling-house, (ii) to use the house for residential purposes only, and (iii) to maintain the house in good repair. All four plots have since been sold: plot A to Paul, plot B to Quentin, plot C to Rachel, and plot D to Stella. The house on plot B has fallen into disrepair and Quentin proposes to divide the house into flats which he will sell. Rachel has started a massage business on plot C. Paul and Stella want to enforce the covenants against Quentin and Rachel.
Advise them.

Can Paul & Stella enforce covenant on Quentin & Rachel?
- Burden: Has B’s & C’s burden passed to Q & R?
- Benefit: Has A’s & D’s benefit passed to P & S?
=> If both answers are ‘Yes’, P & S can enforce covenant on Q & R

Passing of burden
- There is no passing of burden at common law
- For passing of burden in equity, apply Tulk v Moxhay principles:
(1) It must be negative covenant
(i) Negative in substance
(ii) Negative in substance
(iii) Positive, therefore not enforceable; also, Rhone v Stephens limits mutual benefit covenant principle: In this question, there is no link between repair and anything else
(2) Benefit the covenantee’s land? Yes, as the covenants touch & concern the land
(3) Presumption of intention unless proved otherwise
(4) Registration: Burden must have been registered – for unregistered land, register under LCA against B’s & C’s names; for registered land, LPA protects the burden by notice

Passing of benefit
- If burden is claimed in equity, benefit has to be established in equity as well
- Requirements:
(1) Covenants touch & concern the land
(2) Annexation / Assignment / Building scheme

Effective annexation?
- ‘with Alex & his successor-in-title’
-> No effective annexation based on 19th century principle: no mentioning of land to be benefited – insufficient wording
-> Apply Federated Homes: Land identification is necessary – unlikely there is annexation in this question
* If there is annexation, order of sale is important: Keep A, sells B, then C, finally D
(i) When A annex with B, benefits are to A, C & D
(ii) When A annex with C, benefits are to A & D (because A no longer own plot B)
(iii) When A annex with D, benefits are to A only (A owns plot A only)

Building Scheme?
- For building scheme, order does not matter: benefits will pass to all plots
- Requirement of building scheme, apply Ellistion v Reacher:
(i) All plots must be sold by same vendor: Since Re Dolphin’s Conveyance, no longer a compulsory requirement
(ii) The owner should have laid out the land in lots before selling each off: Since Baxter v Four Oaks Properties Ltd, no longer a compulsory requirement
(iii) The area of the scheme must be defined: Still valid
(iv) Those who purchase from the creator of the scheme do so on the footing that all purchasers shall be mutually bound by and mutually entitled to enforce a defined set of restriction: Still valid

In this question, there is no mutuality: benefits are for A alone, thus there is not a building scheme here

Conclusion: The covenant is subject to registration; there is no building scheme. If there is annexation, B is annexed with Q with plots A, C & D as benefited land; and C is annexed with R with plots A & D